Private label brands: a relationship perspective

Purpose The Australian supermarket industry has long been dominated by two players – Coles and Woolworths. Most recently this dominance has increased significantly and the “Big 2” have used their power more effectively and have introduced an ever-increasing number of “private label” products on supermarket shelves. This study aims to investigate the effect these products have had on the relationship between the supermarkets (buyers) and their suppliers. Design/methodology/approach This qualitative study used in-depth, high engagement interviews with a range of suppliers. An extensive data analysis process was carried out to ensure the coding of the key insights into themes, which helped to answer the aims and objectives of the research. Findings A key contribution of this study has been to highlight the ability of supermarket chains to increase existing dominance by using their ever-increasing private label brand portfolio. The findings indicate an uncertain future for food suppliers, with the situation likely to continue to worsen further as the supermarkets continue to exercise and abuse their power. Originality/value This paper’s main contribution lies in providing a greater understanding of the significance of the effect of private labels on relationships and the implications of these effects. The impact of the supermarket dominance on innovation is especially interesting, given that this has not been previously discussed in the literature. Additionally, the deterioration in trust is significant in this context and to an extent that is rarely seen.